Williams Companies, Inc 10-Q for FY2021 Q2

Williams Companies, Inc. (WMB)

10-Q 2021-08-02 For: 2021-06-30

Added on April 08, 2026

About this 10-Q

Williams Companies, Inc filed this 10-Q on August 2, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.28B; up 28.2% from $1.78B a year earlier
Net income: $304M; up 0.3% from net income of $303M a year earlier
Diluted EPS: $0.25; unchanged from $0.25 a year earlier

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Delaware						73-0569878
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Williams Center
Tulsa, Oklahoma						74172-0172
(Address of principal executive offices)						(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	WMB	New York Stock Exchange


Class						Shares Outstanding at July 29, 2021
Common Stock, $1.00 par value						1,214,958,829


						Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Operations – Three and Six Months Ended June 30, 2021 and 2020						6
Consolidated Statement of Comprehensive Income (Loss) – Three and Six Months Ended June 30, 2021 and 2020						7
Consolidated Balance Sheet – June 30, 2021 and December 31, 2020						8
Consolidated Statement of Changes in Equity – Three and Six Months Ended June 30, 2021 and 2020						9
Consolidated Statement of Cash Flows – Six Months Ended June 30, 2021 and 2020						11
Notes to Consolidated Financial Statements						12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						33
Item 3. Quantitative and Qualitative Disclosures About Market Risk						48
Item 4. Controls and Procedures						48
Part II. Other Information						48
Item 1. Legal Proceedings						48
Item 1A. Risk Factors						49
Item 5. Other Information						49
Item 6. Exhibits						51


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Millions, except per-share amounts)
Revenues:
Service revenues	$	1,460	$	1,446	$	2,912	$	2,920
Service revenues – commodity consideration	51		25		100		53
Product sales	772		310		1,883		721
Total revenues	2,283		1,781		4,895		3,694
Costs and expenses:
Product costs	697		271		1,629		667
Processing commodity expenses	18		15		39		28
Operating and maintenance expenses	379		320		739		657
Depreciation and amortization expenses	463		430		901		859
Selling, general, and administrative expenses	114		127		237		240

Impairment of goodwill (Note 10)	—		—		—		187
Other (income) expense – net	12		6		11		13
Total costs and expenses	1,683		1,169		3,556		2,651
Operating income (loss)	600		612		1,339		1,043
Equity earnings (losses) (Note 4)	135		108		266		130
Impairment of equity-method investments (Note 10)	—		—		—		(938)
Other investing income (loss) – net	2		1		4		4
Interest incurred	(301)		(299)		(597)		(600)
Interest capitalized	3		5		5		10
Other income (expense) – net	2		5		—		9
Income (loss) before income taxes	441		432		1,017		(342)
Less: Provision (benefit) for income taxes	119		117		260		(87)


Net income (loss)	322		315		757		(255)
Less: Net income (loss) attributable to noncontrolling interests	18		12		27		(41)
Net income (loss) attributable to The Williams Companies, Inc.	304		303		730		(214)
Less: Preferred stock dividends	—		—		1		1
Net income (loss) available to common stockholders	$	304	$	303	$	729	$	(215)



Basic earnings (loss) per common share:


Net income (loss)	$	.25	$	.25	$	.60	$	(.18)
Weighted-average shares (thousands)	1,215,250		1,213,601		1,214,950		1,213,310
Diluted earnings (loss) per common share:


Net income (loss)	$	.25	$	.25	$	.60	$	(.18)
Weighted-average shares (thousands)	1,217,476		1,214,581		1,217,344		1,213,310


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	June 30, 2021		December 31, 2020
	(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	1,201	$	142
Trade accounts and other receivables	1,000		1,000
Allowance for doubtful accounts	(1)		(1)
Trade accounts and other receivables – net	999		999
Inventories	194		136

Other current assets and deferred charges	231		152
Total current assets	2,625		1,429
Investments	5,124		5,159
Property, plant, and equipment	43,543		42,489
Accumulated depreciation and amortization	(14,244)		(13,560)
Property, plant, and equipment – net	29,299		28,929
Intangible assets – net of accumulated amortization	7,277		7,444
Regulatory assets, deferred charges, and other	1,182		1,204
Total assets	$	45,507	$	44,165
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	611	$	482

Accrued liabilities	1,005		944

Long-term debt due within one year	2,143		893
Total current liabilities	3,759		2,319
Long-term debt	21,091		21,451
Deferred income tax liabilities	2,179		1,923
Regulatory liabilities, deferred income, and other	4,213		3,889
Contingent liabilities (Note 11)
Equity:
Stockholders’ equity:
Preferred stock	35		35
Common stock ($1 par value; 1,470 million shares authorized at June 30, 2021 and December 31, 2020; 1,249 million shares issued at June 30, 2021 and 1,248 million shares issued at December 31, 2020)	1,249		1,248
Capital in excess of par value	24,401		24,371
Retained deficit	(13,022)		(12,748)
Accumulated other comprehensive income (loss)	(110)		(96)
Treasury stock, at cost (35 million shares of common stock)	(1,041)		(1,041)
Total stockholders’ equity	11,512		11,769
Noncontrolling interests in consolidated subsidiaries	2,753		2,814
Total equity	14,265		14,583
Total liabilities and equity	$	45,507	$	44,165


	The Williams Companies, Inc. Stockholders
	Preferred Stock		Common Stock		Capital in Excess of Par Value		Retained Deficit		AOCI*		Treasury Stock		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	(Millions)
Balance – March 31, 2021	$	35	$	1,249	$	24,384	$	(12,825)	$	(100)	$	(1,041)	$	11,702	$	2,771	$	14,473
Net income (loss)	—		—		—		304		—		—		304		18		322
Other comprehensive income (loss)	—		—		—		—		(10)		—		(10)		—		(10)
Cash dividends – common stock ($0.41 per share)	—		—		—		(498)		—		—		(498)		—		(498)
Dividends and distributions to noncontrolling interests	—		—		—		—		—		—		—		(41)		(41)
Stock-based compensation and related common stock issuances, net of tax	—		—		20		—		—		—		20		—		20


Contributions from noncontrolling interests	—		—		—		—		—		—		—		4		4
Other	—		—		(3)		(3)		—		—		(6)		1		(5)
Net increase (decrease) in equity	—		—		17		(197)		(10)		—		(190)		(18)		(208)
Balance – June 30, 2021	$	35	$	1,249	$	24,401	$	(13,022)	$	(110)	$	(1,041)	$	11,512	$	2,753	$	14,265


Balance – March 31, 2020	$	35	$	1,248	$	24,330	$	(12,013)	$	(205)	$	(1,041)	$	12,354	$	2,905	$	15,259
Net income (loss)	—		—		—		303		—		—		303		12		315
Other comprehensive income (loss)	—		—		—		—		29		—		29		—		29


Cash dividends – common stock ($0.40 per share)	—		—		—		(486)		—		—		(486)		—		(486)
Dividends and distributions to noncontrolling interests	—		—		—		—		—		—		—		(54)		(54)
Stock-based compensation and related common stock issuances, net of tax	—		—		13		—		—		—		13		—		13



Contributions from noncontrolling interests	—		—		—		—		—		—		—		2		2

Other	—		—		—		(1)		—		—		(1)		3		2
Net increase (decrease) in equity	—		—		13		(184)		29		—		(142)		(37)		(179)
Balance – June 30, 2020	$	35	$	1,248	$	24,343	$	(12,197)	$	(176)	$	(1,041)	$	12,212	$	2,868	$	15,080


	The Williams Companies, Inc. Stockholders
	Preferred Stock		Common Stock		Capital in Excess of Par Value		Retained Deficit		AOCI*		Treasury Stock		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	(Millions)
Balance – December 31, 2020	$	35	$	1,248	$	24,371	$	(12,748)	$	(96)	$	(1,041)	$	11,769	$	2,814	$	14,583
Net income (loss)	—		—		—		730		—		—		730		27		757
Other comprehensive income (loss)	—		—		—		—		(14)		—		(14)		—		(14)
Cash dividends – common stock ($0.82 per share)	—		—		—		(996)		—		—		(996)		—		(996)
Dividends and distributions to noncontrolling interests	—		—		—		—		—		—		—		(95)		(95)
Stock-based compensation and related common stock issuances, net of tax	—		1		30		—		—		—		31		—		31


Contributions from noncontrolling interests	—		—		—		—		—		—		—		6		6
Other	—		—		—		(8)		—		—		(8)		1		(7)
Net increase (decrease) in equity	—		1		30		(274)		(14)		—		(257)		(61)		(318)
Balance – June 30, 2021	$	35	$	1,249	$	24,401	$	(13,022)	$	(110)	$	(1,041)	$	11,512	$	2,753	$	14,265


Balance – December 31, 2019	$	35	$	1,247	$	24,323	$	(11,002)	$	(199)	$	(1,041)	$	13,363	$	3,001	$	16,364

Net income (loss)	—		—		—		(214)		—		—		(214)		(41)		(255)
Other comprehensive income (loss)	—		—		—		—		23		—		23		—		23


Cash dividends – common stock ($0.80 per share)	—		—		—		(971)		—		—		(971)		—		(971)
Dividends and distributions to noncontrolling interests	—		—		—		—		—		—		—		(98)		(98)
Stock-based compensation and related common stock issuances, net of tax	—		1		20		—		—		—		21		—		21


Contributions from noncontrolling interests	—		—		—		—		—		—		—		4		4

Other	—		—		—		(10)		—		—		(10)		2		(8)
Net increase (decrease) in equity	—		1		20		(1,195)		23		—		(1,151)		(133)		(1,284)
Balance – June 30, 2020	$	35	$	1,248	$	24,343	$	(12,197)	$	(176)	$	(1,041)	$	12,212	$	2,868	$	15,080


	Transco		Northwest Pipeline		Gulf of Mexico Midstream		Northeast Midstream		West Midstream		Other		Eliminations		Total
	(Millions)
Three Months Ended June 30, 2021
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	613	$	108	$	—	$	—	$	—	$	—	$	(2)	$	719
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		90		315		278		—		(26)		657
Commodity consideration	—		—		10		2		39		—		—		51
Other	2		—		7		52		10		—		(4)		67
Total service revenues	615		108		107		369		327		—		(32)		1,494
Product sales	16		—		53		24		726		44		(87)		776
Total revenues from contracts with customers	631		108		160		393		1,053		44		(119)		2,270
Other revenues (1)	—		—		3		6		(1)		8		(3)		13
Total revenues	$	631	$	108	$	163	$	399	$	1,052	$	52	$	(122)	$	2,283

Three Months Ended June 30, 2020
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	592	$	110	$	—	$	—	$	—	$	—	$	(1)	$	701
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		78		308		297		—		(19)		664
Commodity consideration	—		—		3		1		21		—		—		25
Other	2		—		10		41		17		—		(4)		66
Total service revenues	594		110		91		350		335		—		(24)		1,456
Product sales	20		—		17		1		303		—		(31)		310
Total revenues from contracts with customers	614		110		108		351		638		—		(55)		1,766
Other revenues (1)	2		—		1		5		2		9		(4)		15
Total revenues	$	616	$	110	$	109	$	356	$	640	$	9	$	(59)	$	1,781


	Contract Liabilities		Remaining Performance Obligations
	(Millions)
2021 (six months)	$	83	$	1,724
2022 (one year)	130		3,409
2023 (one year)	111		3,137
2024 (one year)	106		2,723
2025 (one year)	101		2,330

Thereafter	662		18,055
Total	$	1,193	$	31,378


	June 30, 2021		December 31, 2020
	(Millions)
Accounts receivable related to revenues from contracts with customers	$	928	$	892
Other accounts receivable	71		107
Trade accounts and other receivables – net	$	999	$	999


(Exact name of registrant as specified in its charter)


	June 30, 2021
	Stated Capacity		Outstanding
	(Millions)

Long-term credit facility (1)	$	4,500	$	—
Letters of credit under certain bilateral bank agreements			17


					Fair Value Measurements Using
	Carrying Amount		Fair Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Millions)
Assets (liabilities) at June 30, 2021:
Measured on a recurring basis:
ARO Trust investments	$	257	$	257	$	257	$	—	$	—




Additional disclosures:

Long-term debt, including current portion	(23,234)		(27,643)		—		(27,643)		—
Guarantees	(40)		(26)		—		(10)		(16)

Assets (liabilities) at December 31, 2020:
Measured on a recurring basis:
ARO Trust investments	$	235	$	235	$	235	$	—	$	—



Additional disclosures:
Long-term debt, including current portion	(22,344)		(27,043)		—		(27,043)		—
Guarantees	(40)		(27)		—		(11)		(16)


	Pension Benefits
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Millions)
Components of net periodic benefit cost (credit):
Service cost	$	7	$	7	$	15	$	15
Interest cost	7		9		14		19
Expected return on plan assets	(11)		(14)		(22)		(27)

Amortization of net actuarial loss	3		7		7		11
Net actuarial loss from settlements	1		2		1		8
Net periodic benefit cost (credit)	$	7	$	11	$	15	$	26


	Other Postretirement Benefits
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Millions)
Components of net periodic benefit cost (credit):

Interest cost	$	2	$	1	$	3	$	3
Expected return on plan assets	(3)		(2)		(5)		(5)


Reclassification to regulatory liability	—		—		1		1
Net periodic benefit cost (credit)	$	(1)	$	(1)	$	(1)	$	(1)


	Cash Flow Hedges		Foreign Currency Translation		Pension and Other Postretirement Benefits		Total
	(Millions)
Balance at December 31, 2020	$	(3)	$	(1)	$	(92)	$	(96)

Other comprehensive income (loss) before reclassifications	(26)		—		—		(26)
Amounts reclassified from accumulated other comprehensive income (loss)	6		—		6		12
Other comprehensive income (loss)	(20)		—		6		(14)

Balance at June 30, 2021	$	(23)	$	(1)	$	(86)	$	(110)


					Impairments
					Six Months Ended June 30,
	Segment	Date of Measurement	Fair Value		2021		2020
			(Millions)





Impairment of equity-method investments:
RMM (1)	West	March 31, 2020	$	557			$	243
Brazos Permian II (1)	West	March 31, 2020	—				193
Caiman II (2)	Northeast G&P	March 31, 2020	191				229
Appalachia Midstream Investments (2)	Northeast G&P	March 31, 2020	2,700				127
Aux Sable (2)	Northeast G&P	March 31, 2020	7				39
Laurel Mountain (2)	Northeast G&P	March 31, 2020	236				10
Discovery (2)	Transmission & Gulf of Mexico	March 31, 2020	367				97





Impairment of equity-method investments					$	—	$	938


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Millions)
Other Modified EBITDA	$	20	$	8	$	53	$	15


Sources:
			Cash and cash equivalents on hand
			Cash generated from operations
			Distributions from our equity-method investees
			Utilization of our credit facility and/or commercial paper program
			Cash proceeds from issuance of debt and/or equity securities
			Proceeds from asset monetizations

Uses:
			Working capital requirements
			Capital and investment expenditures
			Product costs
			Other operating costs including human capital expenses
			Quarterly dividends to our shareholders
			Debt service payments, including payments of long-term debt
			Distributions to noncontrolling interests


Available Liquidity	June 30, 2021
	(Millions)
Cash and cash equivalents	$	1,201
Capacity available under our $4.5 billion credit facility, less amounts outstanding under our $4 billion commercial paper program (1)	4,500
	$	5,701


	Cash Flow	Six Months Ended June 30,
	Category	2021		2020
		(Millions)
Sources of cash and cash equivalents:
Operating activities – net	Operating	$	1,972	$	1,930
Proceeds from long-term debt (see Note 8)	Financing	898		2,196
Proceeds from credit-facility borrowings	Financing	—		1,700

Uses of cash and cash equivalents:
Common dividends paid	Financing	(996)		(971)
Capital expenditures	Investing	(685)		(613)
Dividends and distributions paid to noncontrolling interests	Financing	(95)		(98)
Purchases of and contributions to equity-method investments	Investing	(44)		(66)
Payments of long-term debt	Financing	(11)		(1,526)
Payments on credit-facility borrowings	Financing	—		(1,700)

Other sources / (uses) – net	Financing and Investing	20		(8)
Increase (decrease) in cash and cash equivalents		$	1,059	$	844


Exhibit No.		Description

2.1	—	Agreement and Plan of Merger dated as of May 16, 2018, by and among The Williams Companies, Inc., SCMS LLC, Williams Partners L.P., and WPZ GP LLC (filed on May 17, 2018 as Exhibit 2.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
2.2	—	Amendment No 1. to Agreement and Plan of Merger dated as of May 1, 2016, by and among The Williams Companies, Inc., Energy Transfer Corp LP, Energy Transfer Corp GP, LLC, Energy Transfer Equity, L.P., LE GP, LLC, and Energy Transfer Equity GP, LLC (filed on May 3, 2016 as Exhibit 2.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
2.3	—	Agreement and Plan of Merger dated as of September 28, 2015, by and among The Williams Companies, Inc., Energy Transfer Corp LP, Energy Transfer Corp GP, LLC, Energy Transfer Equity, L.P., LE GP, LLC, and Energy Transfer Equity GP, LLC (filed on October 1, 2015 as Exhibit 2.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.1	—	Amended and Restated Certificate of Incorporation as supplemented (filed on May 26, 2010, as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.2	—	Certificate of Designations of Series B Preferred Stock of The Williams Companies, Inc. (filed on July 17, 2018 as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.3	—	Certificate of Amendment dated August 10, 2018 (filed on August 10, 2018 as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.4*	—	By-Laws of The Williams Companies, Inc., as last amended effective July 28, 2021.
3.5	—	Certificate of Designations of Series C Participating Preferred Stock of The Williams Companies, Inc. (filed on March 20, 2020 as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8‑K (File No. 001-04174) and incorporated herein by reference).
31.1*	—	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S‑K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	—	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**	—	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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			THE WILLIAMS COMPANIES, INC.
			(Registrant)

			/s/ John D. Porter
			John D. Porter
			Vice President, Controller, and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer)


			/s/ Alan S. Armstrong
			Alan S. Armstrong
			President and Chief Executive Officer
			(Principal Executive Officer)


			/s/ John D. Chandler
			John D. Chandler
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)